N.Y. Comp. Codes R. & Regs. tit. 11, § 54.6 – Insurance policy requirements.

(1) Mortality and expense risks shall be borne by the insurer. The mortality and expense charges shall be subject to the maximums stated in the contract. More favorable charges, if any, must be credited to the policy not less frequently than annually.
(2) For scheduled premium policies, a minimum death benefit shall be provided in an amount at least equal to the initial face amount of the policy so long as premiums are duly paid (subject to the provisions of paragraph [b][10] of this section).
(3) The policy benefits shall reflect the investment experience of one or more separate accounts established and maintained by the insurer.
(4) Each variable life insurance policy shall be credited with the full amount of the net investment return applied to the benefit base.
(5) Any changes in variable death benefits of each variable life insurance policy shall be determined at least annually.
(6) The policy value and cash surrender value of each variable life insurance policy shall be in accordance with section 54.7 of this Part.
(7) The computation of values required for each variable life insurance policy may be based upon such reasonable and necessary approximations as are acceptable to the superintendent.
(b) Mandatory policy provisions.
No variable life insurance policy shall be delivered or issued for delivery in this State unless it conforms in substance to the following provisions, the provisions of section 3203 of the Insurance Law as modified by the provisions of section 4240(d), or provisions more favorable to the holder of such policies:
(1) The cover page or pages corresponding to the cover page of each such policy shall contain:
1. (i) a prominent statement that the amount or duration of death benefit may be variable or fixed under specified conditions and may increase or decrease;
2. (ii) a prominent statement that policy values may increase or decrease in accordance with the experience of the separate account, subject to any specified minimum guarantees;
3. (iii) a statement describing any minimum death benefit required pursuant to paragraph (a)(2) of this section;
4. (iv) the method, or a reference to the policy provision, which describes the method for determining the amount of insurance payable at death;
5. (v) a captioned provision which provides that the policyholder may return the variable life insurance policy within 10 days of receipt of the policy and receive a refund of all premium payments of such policy; and
6. (vi) such other items as are currently required for general account life insurance policies and which are not inconsistent with this Part.
(2) For scheduled premium policies, a provision for a grace period either of 30 days or one month from the premium due date, which shall provide (i) that where the premium is paid within the grace period, policy values will be the same as if the premium had been paid on or before the due date, and (ii) that where the insured dies during the grace period without having paid the premium, the policy values will be the same as if the premium had been paid on or before the due date, except for the deduction of the overdue premium.
1. (i) For flexible premium policies, a provision for a grace period beginning on the policy processing day when the total charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day exceed, unless otherwise provided in the policy, the net cash surrender value under the policy to pay such charges in accordance with the terms of the policy. Such grace period shall end on a date not less than 61 days after the policy processing day on which the insurer determined that an insufficiency had occurred, and the insurer shall send the Report to Policyholders required by section 54.11(c) of this Part within 30 days of such policy processing day.
2. (ii) The death benefit payable during the grace period will equal the death benefit in effect immediately prior to such period less any overdue charges. If the policy processing days occur monthly, the insurer may require the payment of a premium sufficient to keep the policy in force for three months beginning with the policy processing day on which, unless otherwise provided in the policy, the net cash surrender value under the policy was insufficient to pay all charges authorized by the policy that are necessary to keep such policy in force until the next policy processing day.
(3)
(4) For scheduled premium policies, a provision that the policy will be reinstated at any time within three years from the date of default upon the written application of the insured and evidence of insurability, including good health, satisfactory to the insurer, unless the cash surrender value has been paid or the period of extended insurance has expired, upon the payment of any outstanding indebtedness arising subsequent to the end of the grace period following the date of default together with accrued interest thereon to the date of reinstatement and the payment of an amount not exceeding the greater of subparagraph (i) or (ii), plus (iii):
1. (i) all overdue premiums (other than for incidental insurance benefits) and any other indebtedness in effect at the end of the grace period following the date of default, with interest at a rate not exceeding six percent per annum for overdue premiums and at a rate not exceeding the applicable policy loan rate or rates for indebtedness compounded annually; or
2. (ii) 110 percent of the increase in cash surrender value resulting from reinstatement; and
3. (iii) all overdue premiums for incidental insurance benefits, with interest at a rate not exceeding six percent per annum compounded annually.
(5) A full description of the benefit base and of the method of calculation and application of any factors used to adjust variable benefits under the policy.
(6) A provision designating the separate account to be used and stating that the assets of such separate account shall be valued at least as often as any policy benefits vary, but no less frequently than annually for a private placement variable life insurance policy and monthly for any other variable life insurance policy.
(7) Except in the case of a private placement variable life insurance policy, a provision that at any time during the first 18 policy months, so long as the policy is in force on a premium-paying basis, the owner may exchange the policy without evidence of insurability for a policy of general account life insurance on the life of the insured for the same amount of insurance as the initial face amount of the variable life insurance policy, and on a plan of insurance specified in the policy, subject to the following requirements:
1. (i) the new policy shall bear the same date of issue and issue age as the variable life insurance policy;
2. (ii) the new policy shall be issued on a substantially comparable plan of insurance offered in this State by the insurer (or if not available from the insurer, by a subsidiary of the insurer, its parent or an affiliate licensed to do a life insurance business in this State) with the same date of issue of the variable life insurance policy and at the rates in effect on that date for the same class of risk;
3. (iii) the new policy shall include such incidental insurance benefits as were included in the variable life insurance policy if such incidental insurance benefits were then available for issue with the new policy; and
4. (iv) the exchange shall be subject to an equitable premium or policy value adjustment that takes appropriate account of the premiums and policy values under the original and new policies. A detailed statement of the method of computing such adjustment shall be filed with the superintendent.
(8) A provision that:
1. (i) if no premium is in default or if the policy is being continued under a variable nonforfeiture benefit, payment of variable death benefits in excess of any minimum death benefits, cash surrender values, policy loans or partial withdrawals (except when used to pay premiums), or partial surrenders may be deferred for any period during which the New York State Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical; and
2. (ii) if the policy is being continued under a fixed nonforfeiture benefit or to the extent benefits are being paid from the general account, payment of any cash surrender value or loan may be deferred for up to six months from the date of request.
(9) For scheduled premium policies, a provision for nonforfeiture insurance benefits. The insurer may establish a reasonable minimum cash surrender value below which any nonforfeiture insurance options will not be available, but the policyholder shall have the right to receive a lump sum cash payment. In addition, a summary of the method for computing the policy value and the cash surrender value under the policy shall be included. Any surrender charges shall be shown in a table in the policy or otherwise described in the policy.
(10) A provision for policy loans, after the policy has been in force for three full years, which provides the following:
1. (i) The loan value available shall be at least equal to 75 percent of the policy's cash surrender value.
2. (ii) The amount borrowed shall bear interest at a rate not to exceed that permitted by state insurance laws.
3. (iii) Any indebtedness shall be deducted from the proceeds payable on death.
4. (iv) Any indebtedness shall be deducted from the cash surrender value upon surrender or in determining any nonforfeiture benefit.
5. (v) For scheduled premium policies, whenever the indebtedness exceeds the cash surrender value, the insurer shall give notice of any intent to cancel the policy if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice; for flexible premium policies, whenever the total charges authorized by the policy that are necessary to keep the policy in force until the next following policy processing day exceed, unless otherwise provided in the policy, the net cash surrender value under the policy to pay such charges, a report must be sent to the policyholder containing the information specified by section 54.11(c) of this Part.
6. (vi) The policy may include a provision that if at any time, so long as the policy is in force on a premium-paying basis, the variable death benefit is less than it would have been if no loan or withdrawal had ever been made, the policyholder may increase such variable death benefit up to what it would have been if there had been no loan or withdrawal by paying an amount not exceeding 110 percent of the corresponding increase in policy value and by furnishing such evidence of insurability as the insurer may request.
7. (vii) The policy may specify a reasonable minimum amount which may be borrowed at any time, but such minimum shall not apply to any automatic premium loan provision.
8. (viii) No policy loan provision is required if the policy is under the extended insurance nonforfeiture option.
9. (ix) The policy loan provision shall be so constructed that variable life insurance policyholders who have not exercised such provision are not disadvantaged by the exercise thereof.
10. (x) Amounts paid to the policyholders upon the exercise of any policy loan provision may be withdrawn from the separate account and may be returned to the separate account upon repayment, except that a stock insurer may provide the amounts for policy loans from the general account.
11. (xi) The policy shall describe how loans are charged against separate accounts and the effect on such accounts when a loan is made or repaid.
12. (xii) An insurer must credit on the loaned amount a rate at least equal to the loan interest rate less two percent, unless the superintendent allows crediting of a lower rate of interest upon an insurer demonstrating a justification for such lower rate.
(11) In the event the proceeds of the policy are payable in fixed installments or as a fixed annuity, the policy shall contain a table showing the amounts of the installments or annuity payments.
(12) A provision that in the event of a material change in the investment policy of a separate account, any policyholder objecting to such change shall have the option to convert, without evidence of insurability, to a general account life insurance policy; that the insurer will give appropriate notice to such objecting policyholder of the options available; and that the option to convert is exercisable within 60 days after (i) the effective date of such change in the investment policy, or (ii) the receipt of the notice of the options available, whichever is later.
(13) A provision that the policy shall be incontestable by the insurer after it has been in force for two years during the lifetime of the insured; provided, however, that any increase in the amount of the policy's death benefits subsequent to the policy issue date, which increase occurred upon a new application or request of the owner and was subject to satisfactory proof of the insured's insurability, shall be incontestable after any such increase has been in force, during the lifetime of the insured, for two years from the effective date of such increase.
(14) For scheduled premium policies which permit the insurer to adjust premiums, a provision stating the frequency with which premium will be reviewed to determine whether an adjustment should be made. Such frequency must be at least once every five policy years.
(15) For a private placement variable life insurance policy, a provision stating that the payment of variable death benefits shall be made no later than 30 days from the date the request for payment and all necessary documentation are received.
(16) For a private placement variable life insurance policy, a provision stating that the payment of cash surrender values, policy loans, partial withdrawals or partial surrenders shall be made as expeditiously as possible but in no event later than 15 months from the date the request for payment is received.
(c) Optional policy provisions.
The following provisions may in substance be included in a variable life insurance policy or related form delivered or issued for delivery in this State:
(1) In addition to the dividend options required by the provisions of section 4231 of the Insurance Law, the amount of the dividend:
1. (i) may be applied to provide paid-up amounts of additional general account or variable life insurance;
2. (ii) may be deposited in the general account at a rate of interest allowed by the company;
3. (iii) may be applied to provide paid-up amounts of general account one-year term insurance;
4. (iv) may be deposited as a variable deposit in a separate account.
(2) Incidental insurance benefits, which may be offered on a fixed or variable basis.
(3) A provision allowing the policyholder to elect in writing in the application for the policy or thereafter an automatic premium loan on a basis not less favorable than that required of policy loans under paragraph (b)(10) of this section.
(4) An exclusion for suicide within two years of the issue date of the policy; provided, however, that to the extent of the increased death benefits only, the policy may provide an exclusion for suicide within two years of the effective date of any increase in death benefits which results from an application of the owner subsequent to the policy issue date.
(5) A provision allowing the policyholder to make partial withdrawals.
(6) Any other policy provision approved by the superintendent.

Every variable life insurance policy delivered or issued for delivery in this State shall be subject to the following:

(a)